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European Software Industry facing fundamental challenges as ISVs face new buyer types

[London, 27 March 2014] Independent software vendors (ISVs) face a wide-open market with great opportunities, but will need to focus to get the best rewards in the longer term. Discussions at the European ISV Convention staged in London this week recognised the rapid changes in the independent software business, but it was the nature of the change that most experts were concerned about. Rob Craft, senior director of enterprise cloud at Microsoft said that the transition to cloud was not so much a toggle as a slider. HP's cloud portfolio director Hans Van Breda also said that it was an innovation journey. It was when the discussion tried to pin down how far along the slider the industry was, that things became less certain. Rob Craft thought it was 50% of the way, but this was based on the enterprise nature of the business. SMBs will take while longer. And there is a strong role for the channel, all parties agreed. But it could be a very different channel. "End customers focus on outcomes; not hardware/software" so the channel becomes more like a consultancy says Ingram Micro's Advanced Division director Jason Beal.

The European ISV Convention 2014 at the London Lancaster on March 26 heard experts from HP, IBM, Interoute, Microsoft and Oracle set out their ideas to more than a hundred leading ISVs from across Europe. The keynote from Mark Paine of Gartner talked of the nexus of forces - mobility, big data, cloud -combing to force new ways of thinking…. and marketing. Customers need to know who you are and how to find you, he suggested. And this means suppliers such as ISVs need to look beyond the product, re-evaluating routes to market. A key test for any supplier on this differentiation - can an ISV replace its sales messaging with that of a competitor? If this still works, the ISV needs to change and get more focus in its message.

With individuals and whole sections within enterprises bypassing traditional IT departments, ISVs have to work out how to engage with these new buyers, Mark Paine said. The new buyers are tech-savvy, connected, but not from any particular department, and outcome-driven. This means, the Gartner expert told the Convention, that analytics systems bought outside traditional IT models is a real growth point; the new buyers seek rapid innovation and outcomes. Another part of the nexus may not be so obvious in its attraction to ISVs. Big data is non-consumable for most business users, the Convention was told. Customers actually want developers to make big data small - then can tap insights, said BI specialist Jaspersoft. Oracle's VP Sales for ISV/OEM Laurent Zelmanowicz pointed out the huge growth in the Internet of Things, and the wall of data that all sorts of devices, from boats to consumer goods were going to be generating. It is a question of capacity, he said, and the management of these quantities of data. Interoute's CTO Matthew Finnie pointed out that there was still a need to build customer confidence after an era in which the IT industry had supplied solutions that didn't deliver against expectations.

Lauri Saft, director of the IBM Watson cognitive computing partner program was busy after her presentation now that IBM has opened up this powerful tool for development. She said "yes, you can buy a Watson", but a revenue share model also shows how it works for developers and ISVs. The IBM Watson organisation, which offers this cognitive analytics package, is scaling fast and now with 700 employees, will grow internationally to over 2000 people. It was clear how Watson can benefit ISVs, she said - early movers have been able to leap-frog competition. The Watson program was now engaged in bringing all parts of its channel together - app and content developers plus those with the talent to recognise where Watson can be applied. "IBM Watson gets smarter with every bit of data and every interaction," she concluded, saying it had had 1800 applications in a month on how it can be put to use.

Earlier the debate livened up when the issue of measuring outcomes for customers was raised. The idea of profit sharing had been considered by some people, but was viewed as too hard to control once marketing effort and the like were considered.

About IT Europa
IT Europa is the leading provider of strategic business intelligence, news and analysis on the European IT marketplace and the primary channels that serve it. The company publishes European channel publications such as the IT Europa Newsletter, markets a range of database reports and organises European conferences and events for the IT and Telecoms sectors. For further details visit: www.iteuropa.com

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Source: RealWire

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